What is meant by 3rd party logistics?

September 14, 2021

Some relationships are better off with a third party…and I am referring to logistics services in the Philippines. What else should I be pertaining to? 😉

Third-party logistics, commonly known as 3PL, is the outsourcing of operational logistics. 3PL companies offer logistics services such as warehousing, delivery, inventory forecasting, freight forwarding, and packaging. Here are the top three ways Third-Party logistics services in the Philippines help improve company performance:

Smart Delegation

Companies can be overwhelmed with the various operational processes taking place on a daily basis. The risk of failure for some segments of the business becomes higher if these are not managed properly. There are times that the company will be better off delegating the logistics operations to a 3PL company to focus more on higher-level management duties.

Certain areas of the business -- shipping and warehousing, for instance -- are better off handled by a 3PL company since it already has the expertise to accommodate consumer demands effectively. The cost of partnering with a 3PL company outweighs the cost, time, and effort that a company would need to learn these from the ground up.

Process Efficiency

With the increasing customer demand for delivery – fast delivery at that – having a 3PL company handling logistics services is a significant help. Operational efficiency is greatly improved since a 3PL company already has the necessary resources to keep up with the market demands.

International logistics can be easily ventured on because a 3PL already has the technical know-how as well as the connections needed to pull it through.

Lower Cost

Savings are generated from maintenance and manpower if a 3PL company already handles them. When the market suddenly fluctuates, having a 3PL handling the logistics services allows the company to manage the expenses sensibly.

New markets can also be explored cost-effectively since the logistics assets are ready. There is flexibility in such a way no major investments in shipping, warehousing, and manpower resources need to be done.

The bustling industry of logistics services in the Philippines is satisfied by the continuous improvement of 3PL companies. As 3PL companies better their services in terms of resources and innovation, the market will have the benefit of advanced trade and customer experience.

3PL is indeed a good third party!